FHA 203k Loans in Safford

Arizona Renovation Mortgage Programs

From House To Home

If you are buying a home in Safford that needs minor or major upgrades, an FHA 203k Loan is one of many Arizona rehab loan programs that includes funding for home renovation costs in the original loan amount, at the time of purchase.

How Do 203k Loans Work?

Learn about the process of purchasing a home in Safford with an FHA 203k Loan.

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The 203k Loan Advantage

FHA 203k and other rehab home loans give buyers the advantage of shopping for a property in Safford based on location and affordability since many of their desired property upgrades and amenities can be added to the home within a short period after closing.

The reason why these types of home improvement loan programs are so popular with buyers is because they give homebuyers the ability to include the costs of renovating a property into one single mortgage at the time of purchase.

Available for both minor cosmetic or major structural home renovation work, FHA 203k Loans can be used when buying a home as well as for current homeowners through a refinance.

Discounted Listings - Get a better deal when buying a property that needs a little TLC.

The 203k rehabilitation mortgage program was intended to expand homeownership opportunities and affordability while revitalizing communities and neighborhoods by providing financing for properties that need renovation work to make them livable or sellable.

FHA's primary goal is to help borrowers purchase a home they may not otherwise be able to finance based on the down payment requirements of most conventional loan programs. To further that goal, FHA offers favorable loan terms, higher loan limits, and flexible down payment options to qualified buyers.

Getting Started

You can Call us directly @ (855) 228-3271 for any questions about renovation loans, OR CLICK HERE to submit a contact request online and we will have one of our licensed Arizona Rehab Loan Network members connect with you asap.

The following outline highlights the process of getting a renovation loan:

Step 1) Getting Pre-Qualified

Once we have an initial consultation to discuss your goals and questions, the first step is to complete a secure online loan application.

A loan application takes 10-15 minutes at your convenience, and allows the lender to pull a copy of your credit history and submit the initial application through preliminary underwriting for the purpose of matching your unique lending scenario with all available programs that you are eligible for.

At this point your lender can discuss actual rates, fees and program options, as well as issue a pre-qualification letter and home shopping / purchase offer instructions for your real estate agent.

Step 2) Search For A Property

It is beneficial to have your lender and real estate agent communicate ahead of time to ensure there are no misunderstandings about how to prepare purchase offer, what price range to search in and the types of eligible properties and improvements that are available for your specific type of renovation loan.

Step 3) Submitting A Purchase Offer

It is helpful if you and your agent can meet with a contractor to discuss renovation costs about a specific property before an offer has been submitted to the sellers.

Having an idea of the necessary and wish list upgrades will give your agent a better idea of how to negotiate the purchase price.

Step 4) Work Write-Up, Inspections, Appraisal

This is where the home-buyer, contractor and consultant meet, inspections are ordered and final costs are figured into a Work Write-Up and an appraiser is sent to the property to determine as-is and after-repair values.

Your lender will be involved in this process guiding you every step of the way.

Step 5) Final Underwriting

All of the property related reports and inspections are submitted to the bank along with any final borrower documentation for final underwriter review.

If there are questions about the property or appraisal, there may be a little back and forth between the lender, consultant or contractor.

6) Loan Funding

This is where the final closing documents are signed by the buyer and the seller receives their check from the bank for the purchase price.

At this point an escrow account is established for renovation costs.

Let's Talk About Renovation Lending Options

See which Renovation Mortgage Program in Safford your scenario or property may be eligible for.

Rehab Loan Frequently Asked Questions

Most of the popular rehab mortgage loan programs follow basic pre-qaulification process similar to traditional home loans to determine a borrower's eligibility, which is typically based on common factors including credit, income, employment and down payment.

The primary benefit of renovation mortgage programs, such as the FHA 203k loan, is that it allows a buyer to borrow the money to purchase the home and also finance any repairs that are needed and/or desired.

Since the amount of available renovation funds differ between the available rehab loan program according to appraised value, loan amount and the type of upgrades that are planned, the first step in getting pre-qualified for a renovation loan is to talk with a few licensed Arizona FHA 203k Lenders and ask them about their expeience with rehab loans.

Once you find a renovation lender that you can trust and feel confident with, your next step will be to complete a formal secure application which will give that lender permission to pull a copy of your credit history and match your lending scenario with a rehab loan program that best fits your downpayment and monthly budget goals.

The main advantage in working with a local Safford real estate agent who has experience with renovation properties is that their market insight should improve your ability to negotiate the right purchase price based on neighborhood listing trends and property condition.

Having a seasoned REALTOR on your side to communicate with the seller or listing agent is a good way of limiting your exposure to hidden risks or speedbumps that might delay or kill a purchase transation.

Safford FHA 203k Lenders specialize in renovation loans and work with mortgage companies that have an FHA 203k program with trained underwriters, funders and contractor managers.

While the renovation lending process from the homeowner's vantage point is relatively as painless as any other mortgage purchase or refinance program, the higher levels of attention to detail, program knowledge, government compliance and customer communication that a renovation lender has to perform at are significantly more intense than most loan originators are use to.

Bottom Line - mortgage professionals who specialize in FHA 203k or other related rehab loan programs are driven by their passion for helping buyers turn houses into homes, as well as the good they are doing for the local economy and community.

An FHA 203{k} Loan is a home loan program that allows homeowners to get just one mortgage loan, at along-term fixed (or adjustable) rate, to finance both the acquisition and the rehabilitation of the property. To provide funds for the rehabilitation, the mortgage amount is based on the projected value of the property.

"Section 203k (k)" is the technical term for the FHA loan, which is referring to a revision to the National Housing Act (NHB) that was made to enable HUD to promote and facilitate the restoration of the Nation's existing housing stock.

A 203k Mortgage is funded by a licensed Arizona HUD approved lender and the mortgage is insured by the Department of Housing and Urban Development

Section 203(k) fills a unique and important need for homebuyers. When buying a house that needs repair or modernization, homebuyers usually have to follow a complicated and costly process. The interim acquisition and improvement loans often have relatively high interest rates, short repayment terms and a balloon payment. However, Section 203(k) offers a solution that helps both borrowers and lenders, insuring a single, long term, fixed or adjustable rate loan that covers both the acquisition and rehabilitation of a property. Section 203(k) insured loans save borrowers time and money. They also protect the lender by allowing them to have the loan insured even before the condition and value of the property may offer adequate security.

The FHA Streamlined (Cosmetic)

Referred to as the Limited(k), Streamlined K, Streamline or "Small k" 203k loan, the Streamlined 203k loan is the most popular and common of rehab loan programs due to it's flexible underwriting criteria that follows the same liberal guidelines as traditional FHA loans and limited contractor and consultant processes.

HUD has developed an FHA insured mortgage, called the “Streamline (K)” Limited Repair Program that permits homebuyers to finance an additional $35,000 into their mortgage to improve or upgrade their home before move-in. With this product, homebuyers can quickly and easily tap into cash to pay for property repairs or improvements, such as those identified by a home inspector or FHA appraiser.

The Streamlined 203k loan program is intended for homes that don’t need the extensive repairs (structural, landscaping, etc.). The streamlined allows homebuyers to finance the purchase or refinancing of a home and improvements and upgrades of up to $35,000. Unlike the Full 203k there is no minimum total repair amount and homebuyers don’t need to work with a HUD consultant.

203k Streamlined Eligible Improvements

Repair/Replacement of roofs, gutters and downspouts

Repair/Replacement/upgrade of existing HVAC systems

Repair/Replacement/Upgrade of plumbing and electrical systems

Repair/Replacement of flooring

Minor Renovations that do not involve structural repairs (Kitchen/bath remodeling)

Basement finishing and renovation so long as it does not involve structural repairs

Basement waterproofing

Window and door replacements and exterior wall re-siding

203k Streamlined Ineligible Improvements

Renovation including structural changes, like moving a load-bearing wall, new construction or addition of rooms

Landscaping or Fencing

Luxury items like swimming pools, hot tubs, tennis courts, etc.

Work that will not start within 30 days of loan closing or will cause the borrower to be displaced from the home for more than 30 days or renovations that will take longer than 6 months to complete

Full 203K (Structural)

The Full 203K loan is used for homes that need major rehabilitation, or when repairs are structural in nature, involve landscaping, or if the total renovation costs exceed the $35,000 limit of the 203 k streamline loan.

You will need to work with and get approval from a HUD consultant for all planned repairs with a Full 203k loan. The standard loan also has a minimum requirement of $5,000 of repairs. Upper FHA loan limits vary based on property type and location so you’ll need to check with a mortgage planner when considering properties. With a Full 203k loan you can add up to 6 months of mortgage payments into the total loan amount if the HUD consultant determines you will need to be displaced from your home during repairs.

Eligible Improvements for the Full 203K:

All repairs listed above as being eligible for the streamlined loan

Structural alterations and reconstruction such as room additions, repair of termite damage, major remodeling of kitchens and bathrooms, finishing an attic or basement, adding a second story to a home, etc.

Major landscaping and site improvement including grading, tree removal, repair of sidewalks and driveways if they are a safety hazard to the property.

Work that may cause the homeowner to be displaced for longer than 30 days (subject to HUD consultant approval)

For an FHA 203k Loan, the borrower signs a Rehabilitation Loan Agreement which lists three provisions concerning the timeliness of the work:

The work must begin within 30 days of execution of the Agreement.

The work must not cease prior to completion for more than 30 consecutive days.

The work is to be completed within six (6) months following the execution of the Agreement; however, the lender should not allow a time period longer than that required to complete the work.

Your lender will work closely with your contractor, consultant and real estate agent to help eliminate as many delays as possible. If you are simply adding new paint and carpet through a 203k Streamline loan, then your renovation timeline could be a few days or weeks. Each program has its own timeline for construction to be completed, and a renovation lender will help you structure the right rehab loan scenario if you are considering moving a property, expanding from a single unit to four units or any other major structural renovation work.

It is important to remember that if the cost of the rehabilitation increases during the rehabilitation period, the 203(k) mortgage amount CANNOT be increased to cover the additional expenses. This is why it is essential that you carefully select a contractor that will accurately estimate the cost of the improvements and complete the project at or below the estimate.

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About Our Network

Rehab Loan Network is an online community of licensed Arizona renovation mortgage lenders, real estate agents and contractors who provide tips and advice to help local Safford homeowners through the rehab loan process.

This is not a Government website. safford.rehabloannetwork.com is not endorsed by the Department of Veterans Affairs or the US Department of Housing and Urban Development. The content on this site is for educational purposes only and is not an advertisement for a product or an offer to lend. If you have questions about the loan officers featured within our lender directory, please visit the Nationwide Mortgage Licensing System & Directory for more information and to check their licensing status at http://www.nmlsconsumeraccess.org.